Case Details

Case Name: Tata Capital Limited vs. Mr. Ashit Jain (PG to CD- Nidhikamal Automobiles Private Limited)

Court/Authority: National Company Law Tribunal (NCLT), Jaipur Bench

Case Numbers: IA(IBC) No. 316/JPR/2025 in CP No. (IB)-7/95/JPR/2025

Order Date: 26 May 2026

Presiding Members: Ms. Reeta Kohli (Judicial Member), Ms. Kavita Bhatnagar (Technical Member)

Period of Dispute: The underlying loan facilities were sanctioned in 2016-2017. The default was triggered by a recall notice issued on 15 January 2020. The petition was filed on 18 December 2024.

Parties Involved

Petitioner/Financial Creditor: Tata Capital Limited, acting through its Resolution Professional, Mr. Rakesh Kumar Tulsyan.

Respondent/Personal Guarantor/Debtor: Mr. Ashit Jain, personal guarantor for the Corporate Debtor, Nidhikamal Automobiles Private Limited.

Corporate Debtor: Nidhikamal Automobiles Private Limited (vehicle dealership for Tata Motors).

Other Guarantors mentioned: Mrs. Lokmani Jain & Mr. Amitabh Jain (though not party to this specific petition).

Resolution Professional: Mr. Rakesh Kumar Tulsyan, appointed by the NCLT vide order dated 02.06.2025.

Legal Representatives: For Applicant - Amarjit Singh Bedi, Adv., Pooja Pandey, Adv., et al. For Respondent - Shashank Kasliwal, Arjun Parashar, Divisha Misra.

Issues / Allegations / Violations

  • The Financial Creditor, Tata Capital (through Tata Motors Finance Ltd.), alleged a default of ₹5,37,48,799.08 by the Personal Guarantor, Mr. Ashit Jain.
  • The debt arose from two credit facilities extended to the Corporate Debtor, Nidhikamal Automobiles Pvt. Ltd.:
  • A Term Loan of ₹3.5 Crore sanctioned on 16.09.2016, disbursed on 07.09.2017.
  • A Channel Finance facility of ₹1.2 Crore sanctioned on 27.01.2017, disbursed periodically.
  • The total disbursement was ₹4.7 Crore. These facilities were secured by Deeds of Guarantee executed by Mr. Ashit Jain, Mrs. Lokmani Jain, and Mr. Amitabh Jain on 16.09.2016 and 27.01.2017.
  • The Corporate Debtor defaulted on repayment, leading the Financial Creditor to issue a recall notice invoking the personal guarantees on 15.01.2020, followed by a demand notice under Rule 7(1) on 29.03.2024.
  • The Personal Guarantor raised several legal objections against the admission of the petition:
  • Retrospective Applicability: Argued that Section 95 IBC cannot apply to guarantees executed prior to its enforcement on 01.12.2019.
  • Limitation: Contended the petition was time-barred as the default dates (05.06.2019 & 07.09.2019) were over 3 years before the filing date (18.12.2024).
  • Procedural Issues: Alleged bias by the Resolution Professional, merger of two distinct causes of action, insufficient stamp duty on loan documents, non-disclosure of charge creation/realization, and discrepancy in the claimed debt amount.

Findings & Observations

The Tribunal addressed the two primary legal issues:

Issue I: Retrospective Applicability of Section 95 IBC

  • The Tribunal rejected the guarantor's objection, relying on the Supreme Court judgment in Dilip B. Jiwrajka vs Union of India.
  • It held that the IBC is a remedial, procedural law and does not create new liabilities. The trigger for action is the default (15.01.2020), not the execution date of the guarantee (2016-2017). Since the default occurred after Section 95 was enforced (01.12.2019), the provision applies prospectively.

Issue II: Limitation

  • The Tribunal held that the right to apply accrued on the date of invocation of the guarantee (15.01.2020). The ordinary 3-year limitation period would have ended on 14.01.2023.
  • Applying the Supreme Court's order in In Re: Cognizance for Extension of Limitation, the period from 15.03.2020 to 28.02.2022 (715 days) was excluded due to COVID-19. This extended the limitation deadline to 30.12.2024. The petition filed on 18.12.2024 was thus within time.
  • The Tribunal also noted that emails from the Corporate Debtor (09.04.2024 & 15.04.2024) acknowledging the debt and seeking time constituted a fresh acknowledgment, binding the guarantor as per clauses in the Deed of Guarantee, further extending the limitation period.

Other Observations:

  • On different default dates for borrower and guarantor: Cited NCLAT judgment in Mavjibhai Nagarbhai Patel that the date of default for a guarantor depends on the contract terms and can be different from the borrower's default date.
  • On consolidation of claims: Held that filing a single petition for multiple facilities against the same guarantor is permissible and efficient.
  • On stamp duty: Cited a 7-judge SC bench ruling that insufficient stamp duty does not render a document void; it only makes it inadmissible until the duty is paid. This is a fiscal issue, not a jurisdictional bar for IBC proceedings.
  • On other objections (bias, charge creation, debt amount): Found them to be without merit, baseless, or inconsequential to the summary process of admission under IBC.

Penalties / Settlements / Directions

  • Admission of Petition: The main company petition (CP No. (IB)-7/95/JPR/2025) was admitted under Section 100 of the IBC.
  • Initiation of Process: The Insolvency Resolution Process (IRP) was initiated against the Personal Guarantor, Mr. Ashit Jain.
  • Moratorium: A moratorium under Section 101 was declared for 180 days from the date of the order (26.05.2026) or until the approval of a repayment plan, whichever is earlier. During this period:
  • All pending legal actions/proceedings concerning the debtor's debts are stayed.
  • Creditors are barred from initiating any new legal action.
  • The debtor is prohibited from transferring, alienating, or encumbering any assets.
  • Fees: The Financial Creditor was directed to deposit ₹1,00,000 as fees and expenses for the Resolution Professional within one week.

Corrective Actions & Future Obligations

  • The Resolution Professional (Mr. Rakesh Kumar Tulsyan) is directed to:
  • Publish a public notice in one English and one vernacular newspaper within 7 days, inviting claims from all creditors within 21 days of publication.
  • Prepare a list of creditors within 30 days from the notice.
  • Consult with the debtor to prepare a Repayment Plan as per Section 105.
  • Submit the Repayment Plan along with his report to the NCLT within 21 days from the last date for claim submissions.
  • If deemed necessary, summon and conduct a meeting of creditors as per Sections 107-111 and submit a subsequent report under Section 112.
  • The Personal Guarantor is obligated to cooperate with the Resolution Professional in preparing the Repayment Plan.

Final Ruling & Enforcement

  • The Interlocutory Application (IA No. 316/JPR/2025) filed by the RP to submit his report was taken on record and disposed of.
  • The insolvency process against Mr. Ashit Jain is now active. The moratorium is immediately effective.
  • The Resolution Professional must now execute the directions related to public notices, claim verification, and plan preparation as mandated by the Code.
  • The order is final and enforceable, subject to any appeal to the NCLAT.